There have been reincarnations all over the place this week. The deservedly respected Ian Shipway has ‘gone home’ to Simon Chamberlain’s Succession group, the never-dull former TMP’s Richard Craven has surfaced with plans to set up a new national IFA and in the most shocking split since Jordan ‘n’ Pete, pensions ‘pop star’ Steve Bee will be leaving Scottish Life and joining Paradigm to set up an adviser platform business.
For me , 2009 has been the year when the prediction of consolidation that has been doing the conference circuit for years has started to come true. IFA businesses are coming together at an ever increasing pace – news out yesterday too that Buckles are planning to buy three firms in the New Year. The oft-cited popular wisdom that there is no room any more for the mid-size asset manager is also ringing true – with big boys Schroders and Threadneedle announcing cemented relationships with Cofunds over the last few weeks (with associated mutterings about guided architecture and its propriety) and small boutiques taking on the giants with newer propositions, often involving asset allocation services and some passive elements. Yup – it’s official – either fatten up or get skinny. In the same way, people beat up on the smaller platforms looking at AUA and ownership, but I think there will be room in this market for ‘skinny’, smaller, niche specialists truly focussing on post-RDR independents.
Steve Bee gives us a nice segueway from consolidation to employee benefits platforms – Paradigm are reportedly planning to hit this new space with his input. We are holding a seminar on 28 January to look at these emerging beasts – what are they, is there a customer need for them or are they just another way of flogging product by the life cos? The agenda is on the Events page – spaces limited to 50 to encourage senior level debate and we’ve already got over 20 delegates by word of mouth so do contact us if you’re interested in attending. I will modestly say that I think we have some of the best speakers in the industry coming along and I thank our sponsors Logica and GBST for making this event possible.
And now to the angry bit. We’ve been working with an IFA firm this week to help them select a platform – part of this process is sending very specific client portfolios to the platforms for pricing to enable comparison. I have been working with platform pricing for over 10 years now and going through the responses yesterday was nothing short of a nightmare which took me hours. From the sublime “There is no platform charge” to the ridiculous “Transaction fees are w for equities, x for funds, y if that’s in a model portfolio, z if you’ve got blue socks on.” Trying to compare like with like is, I would suggest, impossible for those not sad enough to spend all their time thinking about platforms. The biggest problem for the platforms is how you package this all up – I know from experience that if you promote an all-inclusive fee then those with a low “headline admin fee” who have additional costs for transaction fees, margins on cash, tax wrapper costs, blah blah will crow about how relatively expensive you are. We will be interested in the FSA’s next moves on pricing disclosure, armed with some revenue numbers as they are. How prescriptive will they be?
To close with the comparison theme, Skandia announced the launch of their Platform Due Diligence guide this week. I think that any help for IFAs in this area is useful – have I mentioned that we do lots in this space ;0) – and it’s positive to see the focus moved on from just a pure look at price. I’m sure this will be interesting for IFAs to have a look at. However I really do remain a bit baffled by Skandia’s strategy of spending so much marketing time, PR efforts and money looking externally at competitors? Would you rely on Which? Magazine if it had been produced by Tesco? Anyway, it’s easy to make negative comments, all information in this space is useful, I haven’t read it and I will be interested to read the document if any of our Skandia readers want to send me a copy?
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Have a good weekend all.
Holly
